Bitcoin payments processor Coinbase has added support for the bitcoin payment protocol.
Called BIP 70, the protocol allows communication between a merchant and its customers when transactions are made, and was designed to provide additional security and improve the customer experience.
Coinbase says BIP 70 will offer improved protection against man-in-the-middle attacks on the payment process.
Addition of the protocol brings new features that should come in useful for many merchants:
- Human-readable, secure payment destinations – customers will be asked to authorize payment to a payment processor identified as “example.com” (or “Example, Inc.” if an extended validation certificate is used) instead of an inscrutable, 34-character bitcoin address.
- Secure proof of payment, which the customer can use in case of a dispute with the merchant.
- Resistance from man-in-the-middle attacks that replace a merchant’s bitcoin address with an attacker’s address before a transaction is authorized with a hardware wallet.
- 'Payment received' messages, so the customer knows immediately that the merchant has received, and has processed (or is processing) their payment.
- Refund addresses, automatically given to the merchant by the customer’s wallet software, so merchants do not have to contact customers before refunding overpayments or orders that cannot be fulfilled for some reason.
The protocol will be automatically enabled for all merchants, but Coinbase says the protocol is supported on all of its wallets.
Both merchants and the company's regular users can benefit from BIP 70, however, it is not enabled for regular users by default. For that, they need to access the advanced user settings.
BIP 70 in action
The bitcoin payment protocol was also adopted by BitPay earlier this year, and provides a similar demo here, along with additional information on BIP 70 and its real life applications.
Bitcoin code image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.